Mortgage Market Weekly – Update Mar 9, 2015

In This Issue…

Last Week in Review: February’s Jobs Report was better than expected, while home price gains are at sustainable levels.

Forecast for the Week: Look for news on wholesale inflation, consumer sentiment and retail sales.

View: Spring clean your office space with these easy tips.

Last Week in Review

“Live each season as is passes.” Henry David Thoreau. While much of the nation is still stuck in winter, the labor sector is springing to life.

corelogic-home-price-index_2015-03-09February’s Jobs Report showed that 295,000 jobs were created, well above the 240,000 expected. This was a strong headline number, just slightly marred by the downward revision of 18,000 jobs from what was previously reported for January.

The Unemployment Rate ticked down to 5.5 percent, representing a six-year low. However, the Labor Force Participation Rate (LFPR) fell to 62.8, meaning it is still near the lows last seen in 1978. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery.

Rounding out the report, average hourly earnings increased just marginally by 0.1 percent. This was not inflationary by any means, which is typically Bond-friendly news, as inflation is the kryptonite for fixed investments like Mortgage Bonds. All in all, the Jobs Report shows that the labor sector continues to improve, which is a good sign for our recovery.

In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose by 5.7 percent from January 2014 to January 2015. January’s price increase represents 35 months of consecutive year-over-year increases in home prices nationally. CoreLogic forecasts that prices will rise by 5.3 percent from January 2015 to January 2016, which is considered a more sustainable level than the larger price gains seen in 2013.

The bottom line is that home loan rates remain attractive, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Economic reports don’t begin until Thursday, but the end of the week features several key data points to note.

  • Weekly Initial Jobless Claims will be released on Thursday, as usual.
  • Also on Thursday, Retail Sales for February will be released.
  • Friday brings the Producer Price Index, which measures wholesale inflation, along with the Consumer Sentiment Index.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving –  and when they are moving lower, home loan rates are getting worse.

To go one step further – a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds have declined recently. Home loan rates remain attractive and I will continue to monitor them closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Mar 06, 2015)


The Mortgage Market Guide View…

5 Tips for Spring Cleaning Your Office Space

It may be hard to believe in many parts of the country, but the official start of spring is just a few weeks away. Here are five tips for getting your workspace ready for the season.

Run a zone offense. Be proactive about where you put things. Create zones in your space by function. You could have a zone for where you receive, sort and respond to mail, or a zone where you divide files into meaningful groups, like “act on immediately,” “ongoing projects” and “nice to haves.” By having zones, you can direct new projects, resource materials and correspondence to appropriate places rather than letting them pile up.

Purge and recycle. That stack of newspapers and magazines? If they are time sensitive and you haven’t read them, go ahead and recycle. Have industry magazines? Skim them, rip out relevant articles and then recycle.

Keep VIPs within reach. Reserve prime desk real estate for VIP equipment, supplies and files. Organize your desk, so anything you use every day—throughout the day—is within reach. If you use your stapler often, keep it on the desk. If you only use your tape dispenser every so often, put it in a drawer. Keep what you need an arm’s length away.

Don’t neglect your other desktop. Take care of all those downloads, screen captures and “save as” files that you put on your computer desktop temporarily. Move them to the trash or file appropriately.

Give it a wipe down. The peak of flu season has passed, so get out the disinfecting wipes and give everything a good, thorough cleaning. Wipe down your keyboard, phone and desk surfaces. Dust shelves, picture frames and monitors.

Start spring with a fresh perspective and, as always, feel free to pass this along to your team, clients and colleagues!


The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Don Parsons
Commerce Mortgage – NMLS 2105
450 Newport Center Drive Suite 350
Newport Beach, CA 92660
2130 Main Street Suite 260